Can I sell my car with a note owed on it to a private individual?

Question

I went upside down on a car, and heard that I can sell it to a private individual for the total owed on the car, for cash, then go out and buy myself a less expensive used car.

Answer 1

you'd have to get the cash, give it to the lienholder who will release the title

Answer 2

The buyer would have to willing to pay you more than the car is worth (if you are upside down). You would owe all the money to the bank. Then you could start from scratch in buying another car.

However, a smart buyer is NOT going to pay you more than the car is worth. This means in order to get the title to give to the new buyer you must come up with the cash difference to fully pay off your loan. A smart buyer will not buy on your promise to send him the title after you've raised the cash and paid off the loan. A smart buyer will insist on handling the whole transaction with you at your bank where he can walk away with the clear title.